BSW Ltd v Balltec Ltd

An application for pre-action disclosure under CPR 31.16 requires a properly arguable claim with a real prospect of success. The applicant must identify credible primary facts from which infringement or another cause of action may reasonably be inferred; suspicion or commercial similarity is insufficient. The jurisdictional conditions and the discretionary question whether disclosure is desirable are distinct. Even where the threshold is met, the court must consider the particularity of the allegations, the breadth of the request, commercial confidentiality and whether disclosure is likely to avoid proceedings or save costs. Pre-action disclosure is exceptional in a speculative commercial dispute and cannot be used to inspect a competitor’s confidential designs in the hope of discovering a claim.

BSW sought pre-action disclosure from Balltec under CPR 31.16. The requested documents concerned Balltec’s designs, testing and accreditation material for pipeline recovery tools and mooring connectors.

BSW alleged patent, design right and copyright infringement, together with breach of fiduciary duty by its former director, Mr Emmett. Its case depended principally on the speed with which Balltec had designed and tested competing products after Mr Emmett left BSW. Balltec denied copying and relied on evidence that the products had been designed independently.

The central issues were whether the jurisdictional requirements in CPR 31.16 had been met and, if so, whether disclosure should be ordered in the exercise of the court’s discretion.

1. Application dismissed. The court accepted that Balltec was likely to be a party to any proceedings and, for present purposes, assumed that it could be liable on the alleged fiduciary-duty claim. The jurisdictional threshold under CPR 31.16 was low, but it still required a properly arguable claim with a real prospect of success.
2. That threshold was not satisfied merely by showing that competing products performed the same function or appeared similar. There had to be credible evidence of primary facts from which an act of infringement or breach could reasonably be inferred. The uncorroborated customer comments and the timing theory did not provide that evidential basis.
3. The conditions in CPR 31.16(3)(a) and (b) were not rejected outright, because the earlier authorities on section 33(2) of the Supreme Court Act 1981 and the approach in Black v Sumitomo Corporation indicated that the jurisdictional threshold was not intended to be high. However, CPR 31.16(3)(c) required the court to identify the likely issues and confine disclosure to documents that would fall within standard disclosure. BSW had not specified the design rights relied upon, so that requirement could not be met for the design-right claim.
4. The jurisdictional conditions and the discretionary question were separate. Under CPR 31.16(3)(d), the court had to consider whether disclosure had a real prospect of assisting settlement or saving costs, and then whether disclosure was desirable on all the facts. The latter assessment required attention to the focus of the allegations, the breadth of the request and the confidentiality of the material.
5. This was a speculative commercial claim seeking comprehensive disclosure of a competitor’s confidential designs and products. The allegations lacked particularity, the patent allegations had no evidential foundation, and the copyright claim rested largely on theory. A confidentiality club or independent expert procedure could not cure the fundamental objection. The suggested expert process would effectively rewrite CPR 31.16 and risk turning the application into a mini-trial.

First-instance decision. No prior appellate decision is stated in the judgment.